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Singapore to Raise Levies in Effort to Curb Hiring of Foreign Workers

Feb. 24, 2010 — Earlier this week officials in Singapore announced that the country will raise levies to curb the hiring of foreign workers, amid growing unease among locals regarding the increase of guest workers and immigrants in the past few years, according to a story in Agence France Presse.

According to the story, the phased-in increase from July 1 is aimed at reducing dependence on foreign workers, who already comprise almost one-third of the city-state's total workforce, Finance Minister Tharman Shanmugaratnam said in the AFP story. "We should moderate the growth of the foreign workforce and avoid a continuous increase in its proportion of the total workforce," he said in presenting the 2010 fiscal year budget in parliament. "There are social and physical limits to how many more [foreign workers] we can absorb."

But instead of imposing quotas, Shanmugaratnam said the government will raise the levies paid by companies for every worker they hire. “This allows the foreign workforce to fluctuate across the economic cycle and enables employers who are doing well and need more foreign workers to continue to hire them rather than be constrained by fixed quotas."

According to the story, the government will allot 5.5 billion Singapore dollars (US$3.9 billion) in the next five years to help upgrade the skills of local workers to boost their productivity, resulting in higher salaries.

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